Options Trading News

Facebook bounced yesterday, and fast-money traders have been all over the stock.

optionMONSTER's Heat Seeker monitoring system detected money flowing into the short-term 24.50 weekly calls on Tuesday. More than 5,000 were purchased, mostly for $0.90 to $1.01. The contracts were in the money at the time, giving them a tight correlation to the social-media stock. For investors targeting a quick move, these were the perfect instruments.

They were already counting their profits the next day as FB advanced 3.53 percent to $26.09. But that was nothing compared with the move in the options, which at one point traded as high as $1.67. That's leverage of more than 16 times!

FB had been drifting lower since early February, when it stalled around the same $32 level that's been resistance since last summer, shortly after its initial public offering. But now it's bouncing around the same $25 level that was support in late 2012. It's also the 200-day moving average.

Some 281,000 contracts traded in FB yesterday, almost quadruple the daily average. Weeklies accounted for more than 30 percent of the total.

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.